ICICI Bank Q1 preview | Net profit to rise but treasury losses to cap gains

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26 Aug, 2025 12:21

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ICICI Bank is expected to have another strong quarter in terms of earnings performance and asset quality for the three-month period ended June 30, 2022.

On July 23, the lender is likely to report a 32.3 percent year-on-year rise in net profit to Rs 6,106.8 crore for the quarter, according to an average of estimates from eight brokerages polled by Moneycontrol.

On a sequential basis, however, the private sector bank’s net profit is expected to decline 13 percent because of heavy losses for the treasury department. Brokerage firm Kotak Institutional Equities expects treasury losses worth Rs 2,330 crore for the reported quarter owing to a sharp jump in government bond yields.

Government bond yields jumped more than 60 basis points in the June quarter on the back of a 90-basis-point hike in repo rate by the Reserve Bank of India to tame multi-year high retail inflation measured by the Consumer Price Index. Bond prices move in the opposite direction to their yield.

The hefty losses in treasury income will also weigh on ICICI Bank’s operating performance in the quarter, with pre-provision operating profit expected to decline 2.8 percent sequentially to Rs 10,005.7 crore. On a year-on-year basis, operating performance will remain healthy, growing 12.5 percent.

The topline performance of the bank is expected to be strong as net interest income may rise 19.6 percent year on year and 3.8 percent on-quarter to Rs 13,083 crore, driven by a substantial rise in the loan book.

The lender’s loan portfolio is likely to grow more than 20 percent on a year-on-year basis, driven by the retail and small businesses segments. Both retail and small business loans were much in demand during the quarter with the easing of COVID-19-related restrictions.

The lender's asset quality will continue its recent trend and improve on a sequential basis. Brokerage firm Motilal Oswal Financial Services expects the bank to report a gross non-performing assets ratio of 3.5 percent as against 3.6 percent in the previous quarter. The provision coverage ratio is also likely to improve to 80 percent in the reporting quarter.

ICICI Bank’s net interest margin is expected to remain stable on a sequential basis at 3.9-4 percent for the reporting quarter but rise 10-12 basis points from the year-ago quarter.

On July 22, shares of ICICI Bank ended 1.7 percent higher at Rs 799.6 on the National Stock Exchange.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.